The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 02.03.2021
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The markets continue to try and establish a constant trend, but both resistance and supports are playing an important part. Bitcoin has risen higher and is attempting to break above the $50,000 resistance level but it seems that the momentum to break higher might be in jeopardy. EURUSD and Gold and both facing downward pressure as the ISM figures from the U.S. gave much needed optimism in the market that we might be close at the end of the pandemic.
With that said, let’s find out how the markets are doing on March 2nd, 2021.
Market Recap
After bouncing from the low point of $43,000, Bitcoin was able to gather enough bullish strength to continue moving higher well past the $47,500 resistance even attempting to break above the $50,000. The movement higher was clear as both the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) started to print in the green zone. However, it seems that the mentioned resistance has kept any further gains in check as it converges with the 100-SMA (Simple Moving Average) on the 4-hour chart.
The negative pressure that has accompanied the EURUSD since the rejection of the 1.2240 resistance, has continued to wreak havoc on the instrument. After failing to keep trading above the 1.2065 support, EURUSD fell towards the 1.2025 and broke through that as well. The next support which the Bears will be looking to break lies at the 1.2000, below which the 1.1950 critical support will be the main level to keep things in check.
Gold was attempting to stage a comeback from the negative pressure that led it to the $1,720. The instrument managed to rise towards the $1,760 in bullish pressure, however, the mentioned level proved too strong for the already weak bullish move and the result was a rejection and the move lower continued. Gold continued to fall below the $1,720 to reach the $1,707 before starting another move upwards, but it currently battles against the support-turned-resistance level at $1,720.
What’s the strategy you’re going to use when it comes to trading these markets? Will the markets continue to focus on the negative pressure they have been under? Or will there be at least some relief from the constant bearish pressure?
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Bitcoin Revisits $50,000
Bitcoin Bulls were not going to sit idly by and let the negative pressure remove all the positive momentum they have garnered, so after the fall towards the 200-SMA, and reaching the $43,000 support, the Bulls made themselves known. The movement higher carried Bitcoin above the $47,500 resistance level which has caused some trouble for the instrument in the past couple of days, and that was the first sign that the Bulls are back in command.
The movement continued to move BTC towards the $50,000 resistance level as the momentum seems to have started to lose steam. The 100-SMA has kept a lid on any kind of positive momentum as it converges with the $50,000 making things that much more difficult to gain any more upside. The RSI and MACD are showing a decrease in the positive momentum as the former stops at the 60-level and MACD showing the same decrease with the drop in the histogram.
As mentioned, the current resistance lies at the $50,000 and the Bulls need to break above that level as well as the $51,000. Should that fail to happen, there could be more downward pressure building leading the instrument towards the $48,000. Breaking below the first level of support will have Bears targeting the $46,500, and if the Bulls fail to protect this level, the $43,000 will come under attack once more.
Current Market Sentiment: Neutral.
EURUSD Continues to Fall
The relentless dive in the precious metal (gold) has forced more downward pressure on the EURUSD as well as other major currencies as the USD continues to gain more power. The common currency is currently battling against the 1.2021 support level which is also converging with the 100-SMA on the daily chart. This is important as back in early February the same SMA helped fuel a move towards the 1.2200 which might happen again.
The strength in the USD is coming on the back of an upbeat in the U.S. ISM Manufacturing PMI (Purchasing Managers’ Index). This economic figure showed that manufacturing activity has increased to a three-year high as a surge in new orders gave hope that we are at the end of the pandemic. Furthermore, adding to the rise in USD is the most recent decline in the U.S. stock market with the S&P 500 dropping almost 0.20% for the day.
The Bears will most likely continue to push the instrument if certain things come to happen. The first thing that should happen is the risk aversion that is coming from Europe and specifically from the preliminary Eurozone CPI (Consumer Price Index), which is expected to print below estimates, which in turn would validate the current dovish stance adopted by the ECB (European Central Bank).
Current Market Sentiment: Bearish
Gold Faces Uphill Battle
During the Asian session, Gold witnessed increased bearish pressure as it fell almost $16 hitting the lowest levels since June 2020 at $1,710. The overall movement in Gold is to the downside, no doubt about it, as the precious metal has recorded red candles for the fourth straight day. All of this comes on the back of the USD which continues to bring in more demand after a strong PMI release as mentioned in the EUR section of the brief.
Furthermore, despite the current fall in the U.S. Treasury yields and the optimism surrounding the U.S. stimulus package failed to do anything to the yellow metal as it continues to fall. There is some positive news, but it all depends on whether the U.S. Treasury yields continue to decline as they have. Should that happen we can expect an intensifying risk-off mood allowing some kind of a positive bounce in the precious metal.
Looking at the resistance and support structure, we can notice that the instrument will be facing intense resistance pressure with the first level seen at $1,717, which will halt any kind of recovery that the instrument might be facing. After which the $1,720 will play a major role followed closely by the $1,729. The major resistance, however, lies at $1,755. On the downside, the $1,710 will be the first level of support which Bears will likely target, below which the $1,690 will come into view.
Current Market Sentiment: Bearish.
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